Impartible family estate loses that character after abolition; retained properties revert to Hindu undivided family status for tax purposes.

An ancestral family estate that had descended for generations was held to be impartible by custom, not a fresh Crown-grant estate, so family property could be impressed with impartibility; this point was decided for the Revenue. After abolition of the Istimrari estate, however, the statutory resumption vested the estate in the State and removed the basis of succession by primogeniture, while section 4 of the Hindu Succession Act displaced any inconsistent custom or prior law. The retained immovable properties and business therefore lost their impartible character and were assessable as Hindu undivided family property, not as the holder's individual income.

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Issues: (i) Whether the ancestral Masuda estate was an impartible estate created by Crown grant so as to exclude the rule that self-acquired or family property could be impressed with the character of impartibility; and (ii) whether, after abolition of the Istimrari estate, the immovable properties and business retained by the assessee continued to bear the character of impartible estate and were taxable in his individual status.

Issue (i): Whether the ancestral Masuda estate was an impartible estate created by Crown grant so as to exclude the rule that self-acquired or family property could be impressed with the character of impartibility.

Analysis: The estate had existed in the family long before the sanad of 1875 and succession had already taken place through the family line for several generations. The sanad only recorded a concession relating to revenue and did not establish a fresh Crown grant creating the estate. On that factual footing, the estate was treated as an ancestral impartible estate governed by custom rather than as a Crown-grant estate. A customary impartible estate can be the subject of incorporation of other family property, whereas the position may be different where the estate is held under a Crown grant subject to primogeniture.

Conclusion: This issue was answered against the assessee and in favour of the Revenue.

Issue (ii): Whether, after abolition of the Istimrari estate, the immovable properties and business retained by the assessee continued to bear the character of impartible estate and were taxable in his individual status.

Analysis: The statutory scheme of the Ajmer Abolition of Intermediaries and Reforms Act, 1955 resumed the estate, vested it in the State, and altered the holder's status in respect of retained land to that of a tenant under the Act. The Court held that impartibility attached to the property only so long as the estate remained subject to succession by primogeniture. Once the estate was abolished, the foundation for impartibility disappeared. Section 4 of the Hindu Succession Act, 1956 further displaced any inconsistent custom or pre-existing law relating to succession. The later revival argument based on the 1877 Regulation was rejected because a repealed or inoperative succession rule could not be resurrected after the estate itself had ceased to exist.

Conclusion: This issue was answered in favour of the assessee and against the Revenue.

Final Conclusion: The reference was disposed of by holding that the estate was ancestral and impartible in origin, but the abolition of the Istimrari destroyed its impartible character, so the retained immovable properties and business were assessable as Hindu undivided family property and not as the individual income of the holder.

Ratio Decidendi: When an impartible family estate loses the statutory or customary rule of primogeniture by resumption or abolition, and the governing succession law is overridden by section 4 of the Hindu Succession Act, 1956, the estate ceases to be impartible and reverts to ordinary Hindu joint family property for tax purposes.

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